Problem 1 Assume that a radiologist group practice has the following cost structure: Fixed costs 500,000 Variable cost per procedure Charge (revenue) per procedure $100 Furthermore, assume that the group expects to perform 7,500 procedures in the coming year. a. Construct the group's base case projected P&L statement (See exhibit 5-4). Hint: complete the following table. Total variable costs Total contribution margin Total revenues Fixed costs b. What is the group's contribution margin? c. What is the group's breakeven point in volume? d. What volume is required to provide a pretax profit of $100,000? e. Sketch out a CVP analysis graph depicting the base case situation. See Exhibit 5-1 (Hint: using data from part a (above). populate the following table. Produce the sketch using Excel. When done, copy/paste the sketch below the table) Volume Revenue Fixed Costs Total Costs 1.000 2.000 2.500 1000 3.800 4.000 5.000 6,000 7.000 7.500 Problem 2 You are considering starting a walk-in clinic. Your financial projections for the first year of operations are as follows Revenues (10,000 visits) 400,000 Wages and benefits 220,000 Reni 5,000 Depreciation Utilities 2.500 Medical supplies 50,000 Administrative supplies 10,000 Assume that all costs are fixed, except medical supplies and administrative supplies, which are variable. Furthermore, assume that the clinic must pay taxes at 30 percent rate. a. Construct the clinic's projected P&L statement. b. What number of visits is required for break-even? (Hint: At breakeven, there is zero taxable income and hence zero taxes). Problem 3 Consider the date in the following exhibit for three independent healthcare organizations. Fill in the missing data indicated by question marks. Organisation Total variable Revenues costs Fixed costs Total costs Profit (5) (5) 2.000 (5) Organization Revenues 15) B Total variante Fixed costs. Total (50 1.000 1.600 2.400 (5) Total variae Organization Revenge costs (S) (5) c 4.000 Fixed costs Total costs Profit (5) (5) (5) 600